As summer heat dissipates and milk production ramps up in the Northern Hemisphere, more milk will head to dryers. Coupled with softer powder demand from the world’s big importers, the increase in milk powder production means lower milk powder prices are on the horizon this fall and into 2026, says Betty Berning, analyst with the Daily Dairy Report.
Global demand for nonfat dry milk and skim milk powder (NDM/SMP) is not overly robust, Berning notes. Data from Trade Data Monitor indicate that through the first half of 2025, NDM/SMP imports to Southeast Asia were down. While New Zealand shipments to China were up for the first seven months of the year, 2025 New Zealand SMP exports to all destinations through July fell 7% to 42.3 million pounds relative to the same period in 2024.
In the U.S., CME spot NDM prices have remained supported in the third quarter between $1.25/lb. and $1.30/lb., after having moved higher from the sub-$1.20/lb. level set between early March and early May, the Northern Hemisphere’s spring flush.
“While milk production in the United States has been up year over year in every month this year, volumes dropped seasonally in the heat of summer, providing fewer ingredients to dryers,” Berning says. “Furthermore, milk output from Oceania was limited during this time frame, which was the region’s winter, and tighter global supplies supported and pushed nonfat dry milk and skim milk powder prices higher. However, as fall approaches in the United States and spring arrives in the Southern Hemisphere, more milk is on the horizon.”
In New Zealand, one of the world’s top exporter of milk powders, milk solids in June and July, the start of the 2025-26 season, were up 9% compared with the first two months of the 2024-25 season.
“Milk is pouring in from South America, too. January through June output in Argentina, Uruguay, Brazil, Chile and Mexico was higher than it was during the first six months of 2024,” Berning says. “And European milk production has been on the upswing as well, which will only add to hefty global supplies. Increased output in these regions will likely stymie any further price increases in nonfat dry milk and skim milk powder markets. When excess milk is available, processors send milk to the dryers, and stocks can pile up quickly, depressing prices. In fact, prices have already started to cool.”
At the Sept. 2 Global Dairy Trade (GDT) event, SMP prices dropped to $1.27/lb. (protein adjusted), down 5.0% from the previous GDT event. U.S. CME spot prices tested $1.30/lb. in late July but have since pulled back into the mid-$120 range.
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